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SEC guidance on reduced asset coverage for unlisted BDCs

On October 17, 2019, the staff of the Division of Investment Management (the “Staff”) of the US Securities and Exchange Commission issued guidance regarding an unlisted business development company’s (BDC) repurchase...more

Everybody “Test-the-Waters” - SEC Expands Communications Rule to All Issuers

On September 26, 2019, the Securities and Exchange Commission (SEC) announced that it has expanded the “testing-the-waters” exemption to all issuers. The new rule and related amendments under the Securities Act of 1933, as...more

In tune with the SEC - staff continues dialogue on harmonizing private exemptions

On June 18, 2019, the Securities and Exchange Commission (the “SEC”) issued a concept release (the “Release”) on ways to “simplify, harmonize, and improve the exempt offering framework to expand investment opportunities while...more

Not so FAST – SEC passes rules to implement FAST Act provisions

On March 20, 2019, the SEC adopted rules (the Rules) to implement certain provisions of the FAST Act. The omnibus highway bill called “Fixing America’s Surface Transportation Act” or the “FAST Act,” was signed into law in...more

SEC proposes offering reforms for business development companies and registered closed-end funds

On Wednesday, March 20, the Securities and Exchange Commission voted to propose rule amendments to implement certain provisions of the Small Business Credit Availability Act and the Economic Growth, Regulatory Relief and...more

SEC proposes to expand “testing-the-waters” provisions to all issuers

On February 19, 2019, the Securities and Exchange Commission (SEC) announced a proposal to expand the “testing-the-waters” exemption to all issuers. Currently the exemption is limited to emerging growth companies (EGCs)....more

SEC operating status during the government shutdown

The US Securities and Exchange Commission (SEC) will follow its Operations Plan Under a Lapse in Appropriations and Government Shutdown (the Operations Plan) during the government shutdown, which began on December 21, 2018....more

Considerations for the 2019 proxy season

Companies preparing for their annual shareholder meetings will need to consider a variety of factors, including new Securities and Exchange Commission (SEC) requirements, guidance from Institutional Shareholder Services Inc....more

SEC fines BDC investment adviser for misallocation of expenses and valuation failures

On December 3, 2018, the Securities and Exchange Commission (the SEC) entered an order (the Order) to settle charges arising out of an enforcement action against Fifth Street Management, LLC (FSM). FSM disclosed in March 2016...more

SEC approves amendment to Nasdaq 20% rule to relax the market value test

The US Securities and Exchange Commission (SEC) has approved an amendment to Nasdaq Rule 5635(d), also known as the “20% Rule,” to modify the situations in which a company must obtain shareholder approval before it can issue...more

SEC Staff states that IRS Form 1099-DIV cannot be used to satisfy the requirements of Section 19(a) of the Investment Company Act...

Section 19(a) of the Investment Company Act of 1940 (the 1940 Act) generally prohibits a business development company (BDC) or a registered investment company from making a distribution from any source other than its net...more

The SEC prunes its disclosure rules and forms, but will the changes bear fruit for registered investment companies and BDCs?

The US Securities and Exchange Commission (SEC) has adopted final rules to eliminate “redundant, duplicative, overlapping, outdated, or superseded” disclosure requirements in light of other SEC disclosure requirements and US...more

“Phase two” for private BDCs - SEC permits liquidity for investors through split-off transaction

Private business development companies (BDCs) do not have publicly traded shares. For investors in these vehicles, liquidity opportunities take a number of forms....more

Springtime for BDCs - Congress passes long-sought legislation in spending bill

On March 23, 2018, Congress passed its omnibus spending bill, the Consolidated Appropriations Act of 2018, to fund the federal government until October. Included within the spending bill is legislation, titled the Small...more

Considerations for the 2018 proxy season

Companies preparing for their annual shareholder meetings will need to consider a variety of factors, including new Securities and Exchange Commission (SEC) requirements, guidance from Institutional Shareholder Services, Inc....more

How Will the SEC Operate in the Event of a Government Shutdown?

The US Securities and Exchange Commission (SEC) has issued an “Operations Plan Under a Lapse in Appropriations and Government Shutdown” (the Operations Plan), which details how the SEC will operate in the event of a...more

SEC Staff Provides Disclosure and Accounting Guidance in Response to Recent Tax Reform Legislation

On December 22, 2017, President Trump signed into law tax legislation commonly referred to as the Tax Cuts and Jobs Act (the Tax Bill). The Tax Bill made significant changes to corporate taxation, including, among other...more

Tax Reform Provisions Affecting BDCs and Closed-End Funds

As discussed in Eversheds Sutherland (US) LLP’s Quick Call: Legislative and Tax Reforms – What This Could Mean for Business Development Companies, Congress is currently negotiating a tax reform package that, if passed,...more

Proposed Changes Would Further Modify NYSE Rules on Public Company Announcements

On August 29, 2017, the Securities and Exchange Commission (SEC) published a New York Stock Exchange (NYSE) proposal that would bar companies from issuing material news at the end of the trading day until after designated...more

Reminder: SEC Requires Hyperlinks to Exhibits in Certain Filings Made On or After September 1, 2017

On March 1, 2017, the Securities and Exchange Commission (the SEC) approved rule changes that are designed to facilitate easier and more efficient access to documents that are listed as exhibits to certain SEC filings. For...more

Choice 2.0 and Its Impact on Business Development Companies

In April 2017, the full text of an updated version of the CHOICE Act (CHOICE 2.0) was released followed by a hearing on its contents. On June 8, 2017, the House Financial Services Committee released the draft of CHOICE 2.0, a...more

SBA Further Delays the Adoption of the SBIC Passive Business Rule Impacting BDCs with SBIC Subsidiaries

On May 2, 2017, the Small Business Administration (SBA) published a notice (the May 2 Notice), delaying the effective date of the final rule of the Passive Business Rule (the New Rule) under § 107.720 of the small business...more

SBA Adopts Final Passive Business Rule Impacting BDCs with SBIC Subsidiaries 

On December 28, 2016, the Small Business Administration (SBA) released the final version of the Passive Business Rule (the New Rule) under § 107.720 of the small business investment company (SBIC) regulations. Among other...more

Sutherland Submits Comment Letters on Two SEC Rulemaking Projects Pertinent to Business Development Companies

In response to requests for comment from the U.S. Securities and Exchange Commission (SEC), Sutherland Asbill & Brennan LLP recently submitted comment letters on two SEC rulemaking projects pertinent to business development...more

New SEC Guidance Adds Flexibility to BDC Co-Investing

The U.S. Securities and Exchange Commission (SEC) Division of Investment Management (the Division) just published guidance that will permit business development companies (BDCs) to co-invest with certain persons considered...more

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